Tax Break for Solar Firms Unconstitutional: AG

The state Attorney General released on opinion today saying that a controversial tax break for the solar industry appears to be unconstitutional.

The tax break cuts property tax bills for green energy companies. Attorney General Robert Cooper said this violates a provision of the state constitution that says the legislature cannot set different rules for different taxpayers.

The tax break was pushed through the legislature in the last days of former Gov. Phil Bredesen’s administration.

From the Attorney General’s opinion:

As with pollution control equipment, there is no basis to presume that all machinery and equipment used to produce electricity in a certified green energy production facility is of negligible value.

The Tennessean has been on the forefront of this story since the news of the tax break surfaced around the end of the 2010 session.

From The Tennessean:

The decision will likely rekindle efforts to repeal the property tax break. Bredesen, a Democrat, pushed breaks for green energy as part of his 2010 tax bill, arguing that the state’s nascent green energy sector needed to be bolstered.

But questions about the tax breaks began just weeks after they were passed when Bredesen and two top aides, Economic and Community Development Commissioner Matt Kisber and Revenue Commissioner Reagan Farr, formed a solar energy company.

Comptroller Justin Wilson, a Republican, this year urged the GOP-dominated legislature to repeal the property tax break. Wilson said the break runs against a 1986 attorney general opinion that said the Tennessee constitution requires property tax rules to be the same for everyone.

Trent Seibert can be reached at on Twitter @trentseibert or 615-669-9501.